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Every Corporation Has a Social Duty - Community Values Matter to Investors

7 June, 2005

Ploy Chitsomboon, Bangkok Post 7:06:05

A company's commitment to corporate social responsibility is increasingly becoming a key benchmark for investors in evaluating potential investments, according to local experts.

Corporate social responsibility includes a company's values and policies towards the greater community, whether it be in the form of philanthropy and charity, environmental standards and participation with local residents. Last week, more than 100 senior business executives attended a seminar on CSR trends, sponsored by the Thai Institute of Directors and the World Bank.

Nat Pinnoi, an economist with the World Bank, said the future of businesses rested in part on their corporate social responsibility policies.

”CSR has become remarkably important to investors, strategic partners, and society overall. But in Thailand, we are very much still at the beginning,'' he said.

A number of leading Thai companies, including Siam Cement, Kasikornbank and PTT Plc invest millions of baht each year on community outreach and philanthropy programmes.

MFC Asset Management recently announced the launch of a new ``socially responsible investment'' fund that will invest only in companies that have a clear commitment to CSR. While relatively common in more developed markets, the fund is the first of its kind in Thailand.

Pichit Akrathit, the MFC president, said the company expected to launch the new fund next month.

”By doing this, we hope that we can help expand awareness about CSR among investors while at the same time, creating sustainable returns,'' he said.

Somyos Polachan, a senior vice-president at Electricity Generating Plc, said that accurate, honest reporting was crucial for building confidence among stakeholders.

”When you do the report, bear in mind that you need to tell the truth. Reporting is not about creating an image but to tell the truth. If there's any flaw, you need to say how you will fix it,'' he said. A sustainability report should be a flexible, demand-driven work, he said.

Speakers said that in light of lagging regulations, companies and entrepreneurs should take responsibility themselves in the area of CSR and environmental protection.

”Realistically speaking, we can't wait for the government to take action, as we know that it will be too late,'' Mr Nat said. “I'd say that CSR are voluntary actions that business can take by themselves, over and above compliance with the minimum legal requirement, to address both their own competitive interests and the interests of wider society.''

CSR essentially is about how business takes into account the way it affects the economy, society and environment, Mr Nit said.

Sataporn Jinachitra, president of the Export-Import Bank of Thailand and an IOD director, said companies that made corporate environmental and social responsibility part of their business goals should be rewarded. The IOD was committed to educating corporate directors about the importance of CSR, he said.

”What works best is to do whatever it takes to make top management see the importance of CSR. Once it goes to senior management, it will go further down to policies of the company and it won't be something superficial anymore once set as policy,'' Mr Sataporn said. “It's not something mandatory, but voluntary. But don't forget that foreign investors and buyers have the right to decide whether to purchase goods from us as well.'